Accounting Policies of Primo Chemicals Ltd. Company

Mar 31, 2025

Note No. 2: MATERIAL ACCOUNTING POLICIES.

(a) Accounting Convention

The financial statements are prepared under the
historical cost convention except for certain financial
assets and liabilities that are measured at fair value and
on the basis of going concern. The financial statements
have been prepared on a going concern basis on the
strength of profitability, liquidity and continued support
of the promoters, financial institutions and banks and
with a reasonable expectation that the Company have
adequate resources to continue in operational existence
for the foreseeable future. Thus, they continue to adopt
the going concern basis of accounting in preparing the
financial statements. All expenses and incomes to the
extent considered payable and receivable respectively,
unless stated otherwise, have been accounted for on
mercantile basis.

(b) Use of estimates and judgements

The preparation of financial statements in conformity
with Ind AS requires management to make judgements,
estimates and assumptions that affect the application
of accounting policies and the reported amounts of
assets, liabilities, income and expenses at the date of
these financial statements and the reported amounts of
revenues and expenses for the years presented. Actual
results may differ from these estimates.

Estimates and underlying assumptions are reviewed
at each balance sheet date. Revisions to accounting
estimates are recognised in the period in which the
estimate is revised and future periods affected.

Key sources of estimation uncertainty at the date of
financial statements, which may cause a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year, is in respect of useful lives
of property, plant and equipment, intangible assets, fair
value of financial assets/liabilities and impairment of
investments.

The estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are
discussed below:

i) Useful lives of property, plant and equipment
and intangible assets :

The Company reviews the useful lives of property,
plant and equipment and intangible assets at the
end of each reporting period. This re-assessment may
result in change in depreciation and amortisation
expense in future periods.

ii) Leases:

The Company considers all the extension-options
under the commercial contract for determining
the lease-term which forms the basis for the
measurement of right of-use asset and the
corresponding lease-liability.

iii) Income Tax:

Deferred tax assets are recognised for the unused
tax losses credits for which there is probability
of utilisation against the future taxable profit.
Significant management judgement is required to
determine the amount of deferred tax assets that
can be recognised, based upon the likely timing and
the level of future taxable profits, future tax planning
strategies and recent business performances and
developments.

iv) Provision for rebates and discounts

Provisions for rebates, discounts and other deductions
are estimated and provided for in the year of sales and
recorded as reduction of revenue. Provisions for such
rebates and discounts are accrued and estimated
based on past experience, market conditions and
current contract prices with customers.

v) Allowance for impairment of trade receivables

The Company estimates the probability of collection
of accounts receivable by analysing historical
payment patterns, customer concentrations,
customer credit-worthiness and current economic
trends. If the financial condition of a customer
deteriorates, additional allowances may be required.
Moreover, trade receivables are written off on a
case-to-case basis if deemed not to be collectible
on the assessment of the underlying facts and
circumstances.

vi) Impairment of Investments

The Company reviews the carrying value of long
term investments in equity/preference shares of
associate, subsidiaries and joint venture companies
carried at cost/amortized cost at the end of each
reporting period. If the recoverable amount is less
than its carrying amount, the impairment loss is
accounted for.

(c) Property, Plant & Equipment

Property, plant and equipment are stated at cost less
accumulated depreciation and accumulated impairment
loss, if any. Cost of acquisition or construction is inclusive
of freight, duties, taxes, other directly attributable
incidental expenses and interest on loans attributable to
the acquisition or construction of assets up to the date of
assets available for use as intended by management.
Tangible Assets are stated at fair values. Machinery Spares
have been capitalised as and when issued. Direct costs
are capitalised until the property, plant and equipment
are available for use, as intended by the management.
These costs also include financing cost which has been
capitalized on qualifying assets as per Ind-AS 23. When an
asset is scrapped or otherwise disposed off, the cost and
related depreciation are taken out from books of accounts
and resultant profit (including capital profit) or loss, if any,
is reflected in Statement of Profit & Loss.

The Company has identified spares having value (landed
cost) of H10000/- & above and having life of more than
one year in line with the Ind-AS 16. These spares are
transferred to capital work in progress account and are
capitalized as and when issued. The full value of these
spares is being depreciated over their useful life using the
straight-line method.

An item of PPE is de-recognised upon disposal or when
no future economic benefits are expected to arise from
the continued use of the assets. Any gain or loss arising
on the disposal or retirement of an item of PPE, is
determined as the difference between the sales proceeds
and the carrying amount of the asset, and is recognised in
Statement of Profit and Loss.

Capital work-in-progress includes cost of property, plant
and equipment under installation/under development as
at the reporting date.

(d) Depreciation

The Company has charged depreciation on fixed assets
on straight-line basis (SLM) on a pro-rata basis from
the date of additions / available for use as intended
by management, as per their useful life based on past
operational experience as certified by the technical
staff of the plant. Fixed Assets individually costing up to
H5,000/- are depreciated 100% in the year of purchase.
The intangible assets are being amortised over a period
of 5 years. On assets sold, discarded etc. during the year,
depreciation is provided up to the date of sale/discard.
The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for
on a prospective basis.

Depreciation on all tangible assets is provided on the basis
of estimated useful life and residual value determined
by the management based on a technical evaluation
considering nature of asset, past experience, estimated
usage of the asset, vendor''s advice etc. Estimated residual
value of tangible assets has been taken at 5%.

(e) Intangible Assets:

Intangible Assets acquired are measured on initial
recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses, if
any. These assets are being amortized over a period of
five years. Costs associated with maintaining software
programme are recognized as an expense as incurred.
Intangible assets are amortised over the useful economic
life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The
amortisation period and the amortisation method for an

intangible asset are reviewed at least at the end of each
reporting period.

An intangible asset is derecognised on disposal, or when
no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of
an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of
the asset are recognised in profit or loss when the asset is
derecognised.

(f) Current versus non-current classification

The Company presents assets and liabilities in the balance
sheet based on current / non-current classification.

An asset is classified as current when it is expected to be
realised or intended to be sold or consumed in normal
operating cycle, held primarily for the purpose of trading,
expected to be realised within twelve months after
the reporting period, or cash or cash equivalent unless
restricted from being exchanged or used to settle a liability
for at least twelve months after the reporting period. All
other assets are classified as non-current.

A liability is classified as current when it is expected to
be settled in normal operating cycle, it is held primarily
for the purpose of trading, it is due to be settled within
twelve months after the reporting period, or there is no
unconditional right to defer the settlement of the liability
for at least twelve months after the reporting period. The
Company classifies all other liabilities as noncurrent.

Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.

(g) Valuation of Inventories

The items of finished goods are valued at lower of
cost or estimated net realisable value. Cost of finished
goods includes material cost and appropriate portion of
production and administrative overheads and excludes
interest and marketing expenses. The value of finished
goods stock is exclusive of GST. Cost of raw material,
building material and stores & spares is determined (net of
input tax credit) at monthly weighted average cost basis.
Material in transit is taken at cost price. Stock in process is
valued at cost of raw material added. Scrap, if any, at the
year end does not form part of closing inventory.

(h) Investment in associates enterprises

The company prepares separate financial statements
to account for investments in associate enterprises. The
investments in associates have been accounted for at cost
less accumulated impairment, if any.

(i) Financial instruments
Recognition and initial measurement

All financial assets and financial Liabilities are initially
recognised when the Company becomes a party to the
contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without
a significant financing component) or financial liability
is initially measured at fair value plus or minus, for an
item not at FVTPL, transaction costs that are directly
attributable to its acquisition or issue. A trade receivable
without a significant financing component is initially
measured at the transaction price.

Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial
liabilities at fair value through profit and loss) are added
to or deducted from the fair value of the financial assets
or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition
of financial assets or financial liabilities at fair value
through profit and loss are recognised immediately in
profit and loss.

Classification and subsequent measurement

i) Financial assets

Financial assets at amortised cost : A financial
asset is subsequently measured at amortised cost
if it is held in order to collect contractual cash flows
and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding. The amortised cost is reduced
by impairment losses, if any. Interest income,
foreign exchange gains and losses and impairment

are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.

Financial assets carried at fair value through other
comprehensive income (FVTOCI) : The Company
has made an irrevocable election for its investments
which are classified as equity instruments (Other
than Investment in Subsidiaries, Joint Venture and
Associates) to present the subsequent changes in fair
value in other comprehensive income.

Financial assets at FVTPL : A financial asset which
is not classified in any of the above categories
are subsequently measured at fair value through
profit or loss.

ii) Financial liabilities

Financial liabilities are classified as measured at
amortised cost or FVTPL. A financial liability is
classified as at FVTPL if it is classified as held-for-
trading, it is a derivative or it is designated as such
on initial recognition. Financial liabilities at FVTPL
are measured at fair value and net gains and losses,
including any interest expense, are recognised in
profit or loss. Interest expense and foreign exchange
gains and losses are recognised in profit or loss. Any
gain or loss on derecognition is also recognised in
profit or loss.

(j) Revenue Recognition

Revenue is recognised at the transaction price as per
agreements with the customers after taking into account
the amount of price discount, volume rebate, outgoing
taxes (GST) on sales on satisfaction of performance
obligation by transfer of effective control of the promised
goods to the customer which is generally on dispatch/
delivery of goods, as applicable. The revenue is recognised
on point in time basis.

Interest income from a financial asset is recognised when
it is probable that the economic benefits will flow to the
Company and the amount of income can be measured
reliably. Interest income is accrued on a time basis.

I nsurance, railway and other claims, where quantum of
accruals cannot be ascertained with reasonable certainty,
are accounted on acceptance basis.

Income from service activities is accounted for on rendering
the service in accordance with the contractual terms and
when there is no uncertainty in receiving the same.

(k) Government Grants

Government grants are assistance by government in the
form of transfers of resources to an entity in return for past
or future compliance with certain conditions relating to
the operating activities of the entity. They exclude those
forms of government assistance which cannot reasonably
have a value placed upon them and transactions with
government which cannot be distinguished from the
normal trading transactions of the entity.

Government grants are recognized where there is
reasonable assurance that the company will comply
with the conditions attached to it and that the grants
will be received. Grants are presented as part of income
in the statement of profit and loss; alternatively they are
deducted in reporting the related expense.

(l) Foreign Exchange Transactions

i) Functional and presentation currency

The Financial Statements are presented in Indian
Rupee which is the functional and presentation
currency of the Company.

ii) Transactions and balances

Transactions denominated in foreign currencies are
normally recorded at the exchange rate prevailing
at the time of the transaction. Monetary items
denominated in foreign currencies at the year end
and not covered by forward exchange contracts are
translated at year end rates and those covered by
forward exchange contracts are translated at the
rate ruling at the date of transaction as increased
or decreased by the proportionate difference
between the forward rate and exchange rate on the
date of transaction, such difference having been
recognised over the life of the contract. Any income

or expense on account of exchange difference either
on settlement or on translation is recognised in the
Statement of Profit & Loss.

(m) Employee Benefits

i) Defined Contribution Plan :

Employee defined contribution plans include
Provident Fund and Employee State Insurance.
The Company''s Contribution paid/payable during
the year towards Provident Fund Scheme and
Employees''s State Insurance (where applicable) are
recognised as expense in the Statement of Profit &
Loss. The Company has no further obligations under
the plan beyond its monthly contributions.

ii) Short-term employee benefits:

A liability is recognised for benefits accruing to
employees in respect of wages and salaries in
the period the related service is rendered at the
undiscounted amount of the benefits expected to be
paid in exchange for that service.

iii) Defined Benefit Plan :

The Company''s liabilities towards leave encashment
and gratuity are determined by an independent
actuary, using the Projected Unit Credit Method.
Obligation is measured at the present value of
estimated future cash flows using a discounted
rate that is determined by reference to the market
yields at the Balance Sheet date on Government
Bonds. Actuarial gains and losses are recognised
immediately in the Statement of Profit & Loss as
income or expense and other comprehensive income
as per Ind-AS 19. Present value of Defined Benefit
Obligation is calculated by projecting salaries, exits
due to death, resignation and other decrements,
if any, and benefit payments made during each
month till the time of retirement of each active
member using assumed rates of salary escalation,
mortality & employee turnover rates. The expected
benefit payments are then discounted back from
the expected future date of payment to the date of
valuation using the assumed discount rate.

iv) Gratuity :

Gratuity liability has been covered by master
policies of Life Insurance Corporation of India under
irrevocable trust.

(n) Borrowing Costs

Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. Interest
income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for
capitalisation. All other borrowing costs are recognised
in Statement of Profit & Loss in the period in which they
are incurred.

(o) Earnings Per Share

The Basic Earnings/ (Loss) per Share is computed on
the basis of weighted average number of Equity Shares
outstanding during the financial year. The Diluted
Earnings/(Loss) per Share is computed on the basis of
weighted average number of Equity Shares outstanding
during the year and the Potential Equity Shares.

(p) Taxes on Income

Tax on income for the current period is determined on
the basis of taxable income and tax credits computed in
accordance with the provisions of the Income Tax Act, 1961.

Deferred income tax is recognised using the balance sheet
approach. Deferred tax has been recognised in accordance
with IND-AS 12 on the basis of tax consequences of
difference between the carrying amounts of assets and
liabilities and their tax base.

Deferred tax assets are recognised to the extent that there
is a reasonable certainty that sufficient future taxable
income will be available against which such deferred tax
assets can be realized.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable

profits will be available to allow all or part of the asset to
be recovered.

Deferred tax liabilities and assets are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates
(and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.

---

Mar 31, 2024

NOTE NO. 2: MATERIAL ACCOUNTING POLICIES.

(a) Accounting Convention

The financial statements are prepared under the historical cost convention except for certain financial assets and liabilities that are measured at fair value and on the basis of going concern. The financial statements have been prepared on a going concern basis on the strength of profitability, liquidity and continued support of the promoters, financial institutions and banks and with a reasonable expectation that the Company have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted for on mercantile basis.

(b) Use of estimates and judgements

The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses at the date of these financial statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.

Key sources of estimation uncertainty at the date of financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of useful lives of property, plant and equipment, intangible assets, fair value of financial assets/liabilities and impairment of investments.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

i) Useful lives of property, plant and equipment and intangible assets :

The Company reviews the useful lives of property, plant and equipment and intangible assets at the end of each reporting period. This re-assessment may result in change in depreciation and amortisation expense in future periods.

ii) Leases:

The Company considers all the extension-options under the commercial contract for determining the lease-term which forms the basis for the measurement of right of-use asset and the corresponding lease-liability.

iii) Income Tax:

Deferred tax assets are recognised for the unused tax losses credits for which there is probability of utilisation against the future taxable profit. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, future tax planning strategies and recent business performances and developments.

iv) Provision for rebates and discounts

Provisions for rebates, discounts and other deductions are estimated and provided for in the year of sales and recorded as reduction of revenue. Provisions for such rebates and discounts are accrued and estimated based on past experience, market conditions and current contract prices with customers.

v) Allowance for impairment of trade receivables

The Company estimates the probability of collection of accounts receivable by analysing historical payment patterns, customer concentrations, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required. Moreover, trade receivables are written off on a case-to-case basis if deemed not to be collectible on the assessment of the underlying facts and circumstances.

vi) Impairment of Investments

The Company reviews the carrying value of long term investments in equity/preference shares of associate, subsidiaries and joint venture companies carried at cost/amortized cost at the end of each reporting period. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.

c) Property, Plant & Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Cost of acquisition or construction is inclusive of freight, duties, taxes, other directly attributable incidental expenses and interest on loans attributable to the acquisition or construction of assets up to the date of assets available for use as intended by management.

Tangible Assets are stated at fair values. Machinery Spares have been capitalised as and when issued. Direct costs are capitalised until the property, plant and equipment are available for use, as intended by the management. These costs also include financing cost which has been capitalized on qualifying assets as per Ind-AS 23. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, if any, is reflected in Statement of Profit & Loss.

The Company has identified spares having value (landed cost) of C10000/- & above and having life of more than one year in line with the Ind-AS 16. These spares are transferred to capital work in progress account and are capitalized as and when issued. The full value of these spares is being depreciated over their useful life using the straight-line method.

An item of PPE is de-recognised upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Any gain or loss arising on the disposal or retirement of an item of PPE, is determined as the difference between the sales proceeds and the carrying amount of the asset, and is recognised in Statement of Profit and Loss.

Capital work-in-progress includes cost of property, plant and equipment under installation/under development as at the reporting date.

(d) Depreciation

The Company has charged depreciation on fixed assets on straight-line basis (SLM) on a pro-rata basis from the date of additions / available for use as intended by management, as per their useful life based on past operational experience as certified by the technical staff of the plant. Fixed Assets individually costing up to C5,000/- are depreciated 100% in the year of purchase. The intangible assets are being amortised over a period of 5 years. On assets sold, discarded etc. during the year, depreciation is provided up to the date of sale/discard.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Depreciation on all tangible assets is provided on the basis of estimated useful life and residual value determined by the management based on a technical evaluation considering nature of asset, past experience, estimated usage of the asset, vendor''s advice etc. Estimated residual value of tangible assets has been taken at 5%.

(e) Intangible Assets:

Intangible Assets acquired are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any. These assets are being amortized over a period of five years. Costs associated with maintaining software programme are recognized as an expense as incurred.

Intangible assets are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an

intangible asset are reviewed at least at the end of each reporting period.

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset are recognised in profit or loss when the asset is derecognised.

(f) Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current / non-current classification.

An asset is classified as current when it is expected to be realised or intended to be sold or consumed in normal operating cycle, held primarily for the purpose of trading, expected to be realised within twelve months after the reporting period, or cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current.

A liability is classified as current when it is expected to be settled in normal operating cycle, it is held primarily for the purpose of trading, it is due to be settled within twelve months after the reporting period, or there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Company classifies all other liabilities as noncurrent.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

(g) Valuation of Inventories

The items of finished goods are valued at lower of cost or estimated net realisable value. Cost of finished goods includes material cost and appropriate portion of production and administrative overheads and excludes interest and marketing expenses. The value of finished goods stock is exclusive of GST. Cost of raw material, building material and stores & spares is determined (net of input tax credit) at monthly weighted average cost basis. Material in transit is taken at cost price. Stock in process is valued at cost of raw material added. Scrap, if any, at the year end does not form part of closing inventory.

(h) Investment in associates enterprises

The company prepares separate financial statements to account for investments in associate enterprises. The investments in associates have been accounted for at cost less accumulated impairment, if any.

(i) Financial instruments Recognition and initial measurement

All financial assets and financial Liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at Fair value through Profit & Loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in profit and loss.

Classification and subsequent measurement

i) Financial assets

Financial assets at amortised cost : A financial asset is subsequently measured at amortised cost if it is held in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The amortised cost is reduced by impairment losses, if any. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

Financial assets carried at fair value through other comprehensive income (FVTOCI) : The Company has made an irrevocable election for its investments which are classified as equity instruments (Other than Investment in Subsidiaries, Joint Venture and Associates) to present the subsequent changes in fair value in other comprehensive income.

Financial assets at FVTPL : A financial asset which is not classified in any of the above categories are subsequently measured at fair value through profit or loss.

ii) Financial liabilities

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

(j) Revenue Recognition

Revenue is recognised at the transaction price as per agreements with the customers after taking into account the amount of price discount, volume rebate, outgoing taxes (GST) on sales on satisfaction of performance obligation by transfer of effective control of the promised goods to the customer which is generally on dispatch/ delivery of goods, as applicable. The revenue is recognised on point in time basis.

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis.

Insurance, railway and other claims, where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on acceptance basis.

Income from service activities is accounted for on rendering the service in accordance with the contractual terms and when there is no uncertainty in receiving the same.

(k) Government Grants

Government grants are assistance by government in the form of transfers of resources to an entity in return for past or future compliance with certain conditions relating to the operating activities of the entity. They exclude those forms of government assistance which cannot reasonably have a value placed upon them and transactions with government which cannot be distinguished from the normal trading transactions of the entity.

Government grants are recognized where there is reasonable assurance that the company will comply with the conditions attached to it and that the grants will be received. Grants are presented as part of income in the statement of profit and loss; alternatively they are deducted in reporting the related expense.

(l) Foreign Exchange Transactions

i) Functional and presentation currency

The Financial Statements are presented in Indian Rupee which is the functional and presentation currency of the Company.

ii) Transactions and balances

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Statement of Profit & Loss.

(m) Employee Benefits

i) Defined Contribution Plan :

Employee defined contribution plans include Provident Fund and Employee state insurance. The Company''s Contribution paid/payable during the year towards Provident Fund Scheme and Employees''s State Insurance (where applicable) are recognised as expense in the Statement of Profit & Loss. The Company has no further obligations under the plan beyond its monthly contributions.

ii) Short-term employee benefits:

A liability is recognised for benefits accruing to employees in respect of wages and salaries in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

iii) Defined Benefit Plan :

The Company''s liabilities towards leave encashment and gratuity are determined by an independent actuary, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds. Actuarial gains and losses are recognised immediately in the Statement of Profit & Loss as income or expense and other comprehensive income as per Ind-AS 19. Present value of Defined Benefit Obligation is calculated by projecting salaries, exits due to death, resignation and other decrements, if any, and benefit payments made during each month till the time of retirement of each active member using assumed rates of salary escalation, mortality & employee turnover rates. The expected benefit payments are then discounted back from the expected future date of payment to the date of valuation using the assumed discount rate.

iv) Gratuity :

Gratuity liability has been covered by master policies of Life Insurance Corporation of India under irrevocable trust.

(n) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in Statement of Profit & Loss in the period in which they are incurred.

(o) Earnings Per Share

The Basic Earnings/ (Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the financial year. The Diluted Earnings/(Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the year and the Potential Equity Shares.

(p) Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred income tax is recognised using the balance sheet approach. Deferred tax has been recognised in accordance with IND-AS 12 on the basis of tax consequences of difference between the carrying amounts of assets and liabilities and their tax base.

Deferred tax assets are recognised to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the

liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

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Mar 31, 2023

NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31^st MARCH, 2023

Primo Chemicals Limited (Formerly known as Punjab Alkalies & Chemicals Limited) (‘the Company'') is a limited company incorporated in India. The addresses of its registered office and principal activities of the Company are disclosed in the introduction to the Annual Report. The Ordinary (Equity) shares of the Company are listed on the BSE Limited (“BSE”) in India.

NOTE NO. 1: BASIS OF PREPARATION OF FINANCIAL STATEMENTS

a) Basis of preparation and compliance with Ind AS

These standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter. The Company has consistently applied accounting policies to all years. On March 24, 2021, the Ministry of Corporate Affairs (MCA) through a notification, amended Schedule III of the Companies Act, 2013 and the amendments are applicable for financial period commencing from April 1, 2021. The Company has evaluated the effect of the amendments on its financial statements and complied with the same.

NOTE NO. 2: SIGNIFICANT ACCOUNTING POLICIES

a) Accounting Convention

The financial statements are prepared under the historical cost convention except for certain financial assets and liabilities that are measured at fair value and on the basis of going concern. The financial statements have been prepared on a going concern basis on the strength of profitability, liquidity and continued support of the promoters, financial institutions and banks. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted for on mercantile basis.

b) Use of estimates and judgements

The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses at the date of these financial statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.

Key sources of estimation uncertainty at the date of financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of useful lives of property, plant and equipment, intangible assets, fair value of financial assets/liabilities and impairment of investments.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

i) Useful lives of property, plant and equipment and intangible assets

The Company reviews the useful lives of property, plant and equipment and intangible assets at the end of each reporting period. This re-assessment may result in change in depreciation and amortisation expense in future periods.

ii) Leases

The Company considers all the extension-options under the commercial contract for determining the lease-term which forms the basis for the measurement of right of-use asset and the corresponding lease-liability.

iii) Other estimates

The preparation of financial statements involves estimates and assumptions that affect the reported amount of assets, liabilities, disclosure of contingent liabilities at the date of financial statements and the reported amount of revenues and expenses for the reporting period. Specifically, the Company estimates the probability of collection of accounts receivable by analysing historical payment patterns, customer concentrations, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required.

c) Property, Plant & Equipment

Tangible Assets are stated at fair values. Machinery Spares have been capitalised as and when issued. Direct costs are capitalised until the property, plant and equipment are ready for use, as intended by the management. These costs also include financing cost which has been capitalized on qualifying assets as per Ind-AS 23. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, if any, is reflected in Statement of Profit & Loss.

The Company has identified spares having value (landed cost) of Rs. 10000/- & above and having life of more than one year in line with the Ind-AS 16. These spares are transferred to capital work in progress account and are capitalized as and when issued. The full value of these spares is being depreciated over their useful life using the straight-line method.

d) Intangible Assets

Intangible Assets acquired are measured on initial recognition at cost. These assets are being amortized over a period of five years. Costs associated with maintaining software programme are recognized as an expense as incurred.

e) Depreciation

The Company has charged depreciation on fixed assets on straight-line basis (SLM) as per their useful life based on past operational experience as certified by the technical staff of the plant. Fixed Assets individually costing upto Rs. 5,000/- are depreciated 100% in the year of purchase. The intangible assets are being amortised over a period of 5 years.

f) Valuation of Inventories

The items of inventories are valued at lower of cost or estimated net realisable value. Cost of raw material, building material and stores & spares is determined (net of input tax credit) at monthly weighted average cost basis. Material in transit is taken at cost price. Stock in process is valued at cost of raw material added. Cost of finished goods includes material cost and appropriate portion of production and administrative overheads and excludes interest and marketing expenses. The value of finished goods stock is exclusive of GST. Scrap, if any, at the year end does not form part of closing inventory.

g) Investment in associates enterprises

The Company accounts for its investments in subsidiaries, associates and joint ventures at cost less accumulated impairment, if any.

h) Financial instruments

Trade receivables are initially recognised when they originate. All other financial assets and financial Liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

A financial asset or liability is initially measured at fair value plus transaction costs that are directly attributable to its acquisition or issue.

Current financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

i) Revenue Recognition

Revenue from Sale of goods is measured at the fair value of consideration received or receivable taking into account the amount of price discount, volume rebate, outgoing taxes (GST) on sales. Any amounts receivable from the customer are recognized as revenue after the control over the goods sold are transferred to the customer which is generally on dispatch of goods.

j) Government Grants

The Company is not availing any government grant.

k) Foreign Exchange Transactions

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Statement of Profit & Loss.

l) Employee Benefits

i) Defined Contribution Plan

The Company''s Contribution paid/payable during the year towards Provident Fund Scheme are recognised as expense in the Statement of Profit & Loss.

ii) Defined Benefit Plan

The Company''s liabilities towards leave encashment and gratuity are determined by an independent actuary, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds. Actuarial gains and losses are recognised immediately in the Statement of Profit & Loss as income or expense and other comprehensive income as per Ind-AS 19. Present value of Defined Benefit Obligation is calculated by projecting salaries, exits due to death, resignation and other decrements, if any, and benefit payments made during each month till the time of retirement of each active member using assumed rates of salary escalation, mortality & employee turnover rates. The expected benefit payments are then discounted back from the expected future date of payment to the date of valuation using the assumed discount rate.

iii) Gratuity liability has been covered by master policies of Life Insurance Corporation of India under irrevocable trust.

m) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in Statement of Profit & Loss in the period in which they are incurred.

n) Earnings Per Share

The Basic Earnings/ (Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the financial year. The Diluted Earnings/(Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the year and the Potential Equity Shares.

o) Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax has been recognised in accordance with IND-AS 12 on the basis of tax consequences of difference between the carrying amounts of assets and liabilities and their tax base.

Deferred tax assets are recognised to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

p) Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When provision is measured using the cash flow estimated to settle the present obligation, its carrying amount is the present value of these cash flows (when the effect of the time value of money is material).

q) Leases

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116 and this may require significant judgment. The Company also uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.

The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend or terminate the lease if the Company is reasonably certain based on relevant facts and circumstances that the option to extend or terminate will be exercised. If there is a change in facts and circumstances, the expected lease term is revised accordingly.

The discount rate is generally based on the interest rate specific to the lease being evaluated or if that cannot be easily determined the incremental borrowing rate for similar term is used.

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets.

The Company as a lessee

The right-of-use assets are subsequently depreciated over the shorter of the asset''s useful life and the lease term on a straight-line basis. In addition, the right-of-use asset is reduced by impairment losses, if any.

The lease liability is initially measured at amortised cost at the present value of the future lease payments. When a lease liability is remeasured, the corresponding adjustment of the lease liability is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

r) Statement of Cashflows

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cashflows are segregated into and presented as cashflows from operating, investing and financing activities.

s) Accounting policies not specifically referred above are consistent with generally accepted accounting practices.

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Mar 31, 2021

a) Basis of preparation and compliance with Ind AS

(i) For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in India and complied with the accounting standards (Previous GAAP) as notified under Section 133 of the Companies Act, 2013 read together with Rule 7 of the Companies (Accounts) Rules, 2014, as amended, to the extent applicable, and the presentation requirements of the Companies Act, 2013.

In accordance with the notification dated February 16, 2015, issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (Ind AS) notified under Section 133 read with Rule 4 of Companies (Indian Accounting Standards) Rules, 2015, as amended, and the relevant provisions of the Companies Act, 2013 (collectively, “Ind ASs”) with effect from April 1, 2017 and the Company is required to prepare its financial statements in accordance with Ind ASs for the year ended March 31, 2018. These financial statements as and for the year ended March 31,2018 (the “Ind AS Financial Statements”) are the first financial statements, the Company has prepared in accordance with Ind AS.

(ii) The Company had prepared a separate set of financial statements for the year ended March 31, 2017 in accordance with the Accounting Standards referred to in section 133 of the Companies Act, 2013 (the “Audited Previous GAAP Financial Statements”), which were approved by the Board of Directors of the Company on May 24, 2017. The management of the Company has complied the Special Purpose Comparative Ind AS Financial Statements using the Audited Previous GAAP Financial Statements and made required Ind AS adjustments. The Audited Previous GAAP Financial Statements, and the Special purpose Comparative Ind AS Financial Statements, do not reflect the effects of events that occurred subsequent to the respective date of approval of the Audited Previous GAAP Financial Statements.

NOTE NO. 2: SIGNIFICANT ACCOUNTING POLICIES

a) Accounting Convention

The financial statements are prepared under the historical cost convention except for certain financial assets and liabilities that are measured at fair value and on the basis of going concern. The financial statements have been prepared on a going concern basis on the strength of profitability, liquidity and continued support of the promoters, financial institutions and banks. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted for on mercantile basis.

b) Property, Plant & Equipment

Tangible Assets are stated at fair values. Machinery Spares have been capitalised as and when issued. Direct costs are capitalised until the property, plant and equipment are ready for use, as intended by the management. These costs also include financing cost which has been capitalized on qualifying assets as per Ind-AS 23. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, if any, is reflected in Profit and Loss Statement.

The Company has identified spares having value (landed cost) of Rs.10000/- & above and having life of more than one year in line with the Ind-AS 16. These spares are transferred to capital work in progress account and are capitalized as and when issued. The full value of these spares is being depreciated over their useful life using the straight-line method.

c) Intangible Assets

Intangible Assets acquired are measured on initial recognisation at cost. These assets are being amortized over a period of five years. Costs associated with maintaining software programme are recognized as an expense as incurred.

d) Depreciation

The Company has charged depreciation on fixed assets on straight-line basis (SLM) as per their useful life based on past operational experience as certified by the technical staff of the plant. Fixed Assets individually costing upto Rs.5,000/- are depreciated 100% in the year of purchase. The intangible assets are being amortised over a period of 5 years.

e) Valuation of Inventories

The items of inventories are valued at lower of cost or estimated net realisable value. Cost of raw material, building material and stores & spares is determined (net of input tax credit) at monthly weighted average cost basis. Material in transit is taken at cost price. Stock in process is valued at cost of raw material added. Cost of finished goods includes material cost and appropriate portion of production and administrative overheads and excludes interest and marketing expenses. The value of finished goods stock is exclusive of GST. Scrap, if any, at the year end does not form part of closing inventory.

f) Revenue Recognition

Revenue from Sale of goods is measured at the fair value of consideration received or receivable taking into account the amount of price discount, volume rebate, outgoing taxes (GST) on sales. Any amounts receivable from the customer are recognized as revenue after the control over the goods sold are transferred to the customer which is generally on dispatch of goods.

g) Foreign Exchange Transactions

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss statement.

h) Employee Benefits

i) Defined Contribution Plan

The Company’s Contribution paid/payable during the year towards Provident Fund Scheme and Superannuation Scheme are recognised as expense in the Profit & Loss Statement.

ii) Defined Benefit Plan

The Company’s liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC’s actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial valuation has been done in accordance with Ind-AS 19. Actuarial gains and losses due to remeasurement in the present value of defined benefit obligations resulting from experience are recognized in other comprehensive income. The Company has also reinstated the provision for gratuity due to revaluation of defined benefit in accordance with Ind-AS 19.

iii) Gratuity liability has been covered by master policy of Life Insurance Corporation of India under irrevocable trust.

i) Earnings Per Share

The Basic Earnings/ (Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the financial year. The Diluted Earnings/(Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the year and the Potential Equity Shares.

j) Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax has been recognised in accordance with IND-AS 12 on the basis of tax consequences of difference between the carrying amounts of assets and liabilities and their tax base.

Deferred tax assets are recognised to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized because of renovation and up-gradation of plant and continuation of current market conditions.

k) Accounting policies not specifically referred above are consistent with generally accepted accounting practices.

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Mar 31, 2018

Note No. 1

Significant Accounting Policies

(a) Accounting Convention

The financial statements are prepared under the historical cost convention and on the basis of going concern. Accumulated losses have resulted in erosion of net worth of the Company. The financial statements have been prepared on a going concern basis on the strength of continued support of the promoters, financial institutions and banks. At the request of Company CDR Empowered Group has sanctioned conversion of outstanding loan amount of Rs.4286 lacs into 6605246 Equity Shares as per SEBI Formula i.e. @ Rs.22.95 (Face Value Rs.10/- per share) and Fully Convertible Debentures (FCD) amounting to Rs.2770 lacs. It was further provided that the Company will issue Non-Convertible Debentures (NCD) to CDR Lenders to the extent of Mark to Market Loss in respect of fresh Equity issued by PACL. These FCDs and NCDs shall bear coupon rate equivalent to IDBI base rate as on 30th June, 2015 i.e. 10% p.a. CDR EG further approved waiver of interest on outstanding O.T.S. amount during period April to June, 2015. The Company has received sanction from all the financial institutions and banks. The Company has already issued Equity Shares and Debentures (NCDs & FCDs) to all the lenders as per the CDR sanction. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted for on mercantile basis.

The Company has discounted Debentures in accordance with the effective interest method at the rate of 14% p.a. based on IRR and recognize the balances arrived as per the method in Other Reserve account and in long term borrowings. The Company has also recognized notional interest arrived in Other Comprehensive Income account.

(b) Property, Plant & Equipment

Tangible Assets are stated at values determined by the valuer less depreciation. Machinery Spares have been capitalised as and when issued. Direct costs are capitalised till the assets are ready to be put to use. These costs also includes financing cost (including exchange rate fluctuations) relating to specific borrowing attributable to Tangible Assets. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, if any, is reflected in Profit and Loss Statement.

The Company has identified spares having value (landed cost) of Rs. 10000/- & above and having life of more than one year in line with the Ind-AS 16. These spares are transferred to capital work in progress account and are capitalized as and when issued. The full value of these spares is being depreciated over their useful life. On 1.4.2016, Capital spares amounting 321.72 lacs were transferred from Stores and Spares to Capital work in progress account.

(c) Intangible Assets

Intangible Assets acquired are measured on initial recognisation at cost. These assets are being amortized over a period of five years.

d) Depreciation

The Company has charged depreciation on Fixed Assets as per the useful life specified in Part ‘C’ of Schedule II of the Companies Act, 2013. The life of the components identified by Company is not different than the plant and machinery to which these components relate. Fixed Assets individually costing upto Rs.5,000/- are depreciated 100% in the year of purchase. Depreciation on Foreign Exchange adjustments arising from foreign exchange variations is charged on residual useful life of asset. The intangible assets are being amortised over a period of 5 years.

(e) Valuation of Inventories

The items of inventories are valued at lower of cost or estimated net realisable value. Cost of raw material, building material and stores & spares is determined (net of cenvat) at monthly weighted average basis. Material in transit is taken at cost price. Stock in process is valued at cost of raw material added. Cost of finished goods includes material cost and appropriate portion of production and administrative overheads and excludes interest and marketing expenses. The value of finished goods stock is exclusive of GST. Scrap, if any, at the year end does not form part of closing inventory.

(f) Revenue Recognition

Sale of goods is recognised at the point of dispatch to the Customer. Sales include excise duty applicable but does not include GST.

(g) Foreign Exchange Transactions

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss statement except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

(h) Employee Benefits

i) Defined Contribution Plan

The Company’s Contribution paid/payable during the year towards Provident Fund Scheme and Superannuation Scheme are recognised as expense in the Profit & Loss Statement.

ii) Defined Benefit Plan

The Company’s liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC’s actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial valuation has been done in accordance with Ind-AS 19 and the Company has reinstated the employee benefit liabilities on 1stApril, 2016 and for the year 2016-17. Actuarial gains and losses due to remeasurement in the present value of defined benefit obligations resulting from experience are recognized in other comprehensive income. The Company has also reinstated the provision for gratuity due to revaluation of defined benefit in accordance with Ind-AS 19.

iii) Gratuity liability has been covered by master policy of Life Insurance Corporation of India under irrevocable trust.

(i) Earnings Per Share

The Basic Earnings/ (Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the financial year. The Diluted Earnings/(Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the year and the Potential Equity Shares.

(j) Government Grants

Investment Incentive from State Government has been credited to Investment Incentive Account and is being recognised as income on a systematic and rational basis over the useful life of the assets, in the proportion in which the depreciation on these assets is charged.

(k) Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing difference between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognised to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

However, in view of the loss during the financial year 2017 - 18, the Company has not recognised the Deferred Tax Assets in respect of the loss during the financial year 2017-18.

(l) Accounting policies not specifically referred above are consistent with generally accepted accounting practices.

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Mar 31, 2016

(a) Accounting Convention

The financial statements are prepared under the historical cost convention and on the basis of going concern. Accumulated losses have resulted in erosion of net worth of the Company. The financial statements have been prepared on a going concern basis on the strength of continued support of the promoters, financial institutions and banks. The Company has filed a reference before the Board for Industrial and Financial Reconstruction (BIFR). BIFR has registered the company''s reference as Sick Industrial Company as Case No. 152/2015. At the request of Company CDR Empowered Group has sanctioned conversion of outstanding loan amount of Rs.4286 lacs into 6605246 Equity Shares as per SEBI Formula i.e. @ Rs.22.95 (Face Value Rs.10/- per share) and Fully Convertible Debentures (FCD) amounting to Rs.2770 lacs. It was further provided that the Company will issue Non-Convertible Debentures (NCD) to CDR Lenders to the extent of Mark to Market Loss in respect of fresh Equity issued by PACL. These FCDs and NCDs shall bear coupon rate equivalent to IDBI base rate as on 30th June, 2015 i.e. 10% p.a. CDR EG further approved waiver of interest on outstanding O.T.S. amount during period April to June, 2015. The Company has received sanctions from IDBI Bank Limited, IFCI Limited and LIC of India Limited. The Company has been given time up to 31st October, 2016 for the said conversion. The individual sanction from Punjab National Bank and Punjab & Sind Bank is awaited. The Company is optimistic of a favourable decision in the matter. The Board of Directors, considering the future plan for operations and support of the promoters, lenders, business associates and workmen is hopeful of improved profitability leading to improvement in its financial position. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted for on mercantile basis.

(b) Fixed Assets

Fixed Assets are stated at values determined by the valuer less depreciation. Machinery Spares have been capitalized as and when procured. Direct costs are capitalized till the assets are ready to be put to use. These costs also includes financing cost (including exchange rate fluctuations) relating to specific borrowing attributable to Fixed Assets. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, if any, is reflected in Profit and Loss Statement.

(c) Depreciation

The Company has charged depreciation on Fixed Assets as per the useful life specified in Part ''C'' of Schedule II of the Companies Act, 2013. The life of the components identified by Company is not different than the plant and machinery to which these components relate. Fixed Assets individually costing up to Rs.5,000/-are depreciated 100% in the year of purchase. Depreciation on Foreign Exchange adjustments arising from foreign exchange variations is charged on residual useful life of asset.

(d) Valuation of Inventories

The items of inventories are valued at lower of cost or estimated net realizable value. Cost of raw material, building material and stores & spares is determined (net of cenvat) at monthly weighted average basis. Material in transit is taken at cost price. Stock in process is valued at cost of raw material added. Cost of finished goods includes material cost and appropriate portion of production and administrative overheads and excludes interest and marketing expenses. The value of finished goods stock is inclusive of excise duty Scrap, if any, at the yearend does not form part of closing inventory

(e) Revenue Recognition

Sale of goods is recognized at the point of dispatch to the Customer. Sales include excise duty applicable.

(f) Foreign Exchange Transactions

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognized over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss statement except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

(g) Employee Benefits

i) Defined Contribution Plan

The Company’s Contribution paid/payable during the year towards Provident Fund Scheme and Superannuation Scheme are recognized as expense in the Profit & Loss Statement.

ii) Defined Benefit Plan

The Company''s liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC''s actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial gains and losses are recognized immediately in the Profit & Loss Statement as income or expense.

iii) Gratuity liability has been covered by master policy of Life Insurance Corporation of India under irrevocable trust.

(h) Earnings Per Share

The Basic Earnings/ (Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the financial year. The Diluted Earnings/(Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the year and the Potential Equity Shares.

(i) Government Grants

Investment Incentive from State Government has been credited to Investment Incentive Account and is being recognized as income on a systematic and rational basis over the useful life of the assets, in the proportion in which the depreciation on these assets is charged.

(j) Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized on timing difference between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

However, in view of the loss during the financial year 2015-16, the Company has not recognized the Deferred Tax Assets in respect of the loss during the financial year 2015-16.

(k) Accounting policies not specifically referred above are consistent with generally accepted accounting practices.

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Mar 31, 2015

(a) Accounting Convention

The financial statements are prepared under the historical cost convention and on the basis of going concern. Accumulated losses have resulted in erosion of net worth of the Company. The financial statements have been prepared on a going concern basis on the strength of continued support of the promoters, financial institutions and banks. The final installment of OTS amount under the OTS scheme had fallen due on 1st April, 2015. The Company informed the IDBI Bank Limited, the lead bank, that the Board of Directors of PSIDC, the promoters had approved the conversion of entire balance debt of Rs.4286 lacs into equity shares at a share price as per SEBI formula applicable on the date of freezing/accepting the proposal on certain terms and conditions. The matter was discussed in the Joint Lenders Meeting held on 13th April, 2015. The Lenders agreed to take up the proposal with their respective sanctioning authorities. The Company is optimistic of a favorable decision in the matter. The Board of Directors, considering the future plan for operations and support of the promoters, lenders, business associates and workmen is hopeful of improved profitability leading to improvement in its financial position. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted for on mercantile basis.

(b) Fixed Assets

Fixed Assets are stated at values determined by the valuer less depreciation. Machinery Spares have been capitalized as and when procured. Direct costs are capitalized till the assets are ready to be put to use. These costs also includes financing cost (including exchange rate fluctuations) relating to specific borrowing attributable to Fixed Assets. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, if any, is reflected in Profit and Loss Statement.

(c) Depreciation

The Company has revised depreciation rates on Fixed Assets as per the useful life specified in Part 'C of Schedule II of the Companies Act, 2013. The carrying amount of assets, where the remaining useful life is nil as at 1st April, 2014, has been recognized in the opening balance of profit & loss statement. The carrying amount of assets amounting to Rs.17.96 lacs, where the remaining useful life is nil as at 1 st April, 2014, has been recognized in the opening balance of profit & loss statement. Fixed Assets individually costing up to Rs.5,000/- are depreciated 100% in the year of purchase. Depreciation on Foreign Exchange adjustments arising from foreign exchange variations is charged on residual useful life of asset.

(d) Valuation of Inventories

The items of inventories are valued at lower of cost or estimated net realizable value. Cost of raw material, building material and stores & spares is determined (net of convert) at monthly weighted average basis. Material in transit is taken at cost price. Stock in process is valued at cost of raw material added. Cost of finished goods includes material cost and appropriate portion of production and administrative overheads and excludes interest and marketing expenses. The value of finished goods stock is inclusive of excise duty. Scrap, if any, at the yearend does not form part of closing inventory.

(e) Revenue Recognition

Sale of goods is recognized at the point of dispatch to the Customer. Sales include excise duty applicable.

(f) Foreign Exchange Transactions

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognized over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss statement except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

(g) Employee Benefits

i) Defined Contribution Plan

The Company's Contribution paid/payable during the year towards Provident Fund Scheme and Superannuation Scheme are recognized as expense in the Profits Loss Statement.

ii) Defined Benefit Plan

The Company's liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC's actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial gains and losses are recognized immediately in the Profits Loss Statement as income or expense.

iii) Gratuity liability has been covered by master policy of Life Insurance Corporation of India under irrevocable trust.

(h) Earnings Per Share

The Basic Earnings/ (Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the financial year. The Diluted Earnings/(Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the year and the Potential Equity Shares.

(i) Government Grants

Investment Incentive from State Government has been credited to Investment Incentive Account and is being recognized as income on a systematic and rational basis over the useful life of the assets, in the proportion in which the depreciation on these assets is charged.

(j) Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized on timing difference between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

However, in view of the loss during the financial year 2014-15, the Company has not recognized the Deferred Tax Assets in respect of the loss during the financial year 2014-15.

(k) Accounting policies not specifically referred above are consistent with generally accepted accounting practices.

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Mar 31, 2014

(a) Accounting Convention

These accounts are prepared under the historical cost convention and on the basis of going concern. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted for on mercantile basis.

(b) Fixed Assets

Fixed Assets are stated at values determined by the valuer less depreciation. Machinery Spares have been capitalised as and when procured. Direct costs are capitalised till the assets are ready to be put to use. These costs also includes financing cost (including exchange rate fluctuations) relating to specific borrowing attributable to Fixed Assets. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, if any, is reflected in Profit and Loss Statement.

(c) Depreciation

Depreciation on Fixed Assets has been provided in the accounts on ''Straight Line Method'' as per Schedule XIV to the Companies Act, 1956. Fixed Assets individually costing upto Rs. 5,000/- are depreciated 100% in the year of purchase. Depreciation on Foreign Exchange adjustments arising from foreign exchange variations is charged on residual useful life of asset.

(d) Valuation of Inventories

The items of inventories are valued at lower of cost or estimated net realisable value. Cost of raw material, building material and stores & spares is determined (net of cenvat) at monthly weighted average basis. Material in transit is taken at cost price. Stock in process is valued at cost of raw material added. Cost of finished goods includes material cost and appropriate portion of production and administrative overheads and excludes interest and marketing expenses. The value of finished goods stock is inclusive of excise duty. Scrap, if any, at the year end does not form part of closing inventory.

(e) Revenue Recognition

Sale of goods is recognised at the point of dispatch to the Customer. Sales include excise duty applicable.

(f) Foreign Exchange Transactions

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss statement except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

(g) Employee Benefits

i) Defined Contribution Plan

The Company''s Contribution paid/payable during the year towards Provident Fund Scheme and Superannuation Scheme are recognised as expense in the Profit & Loss Statement.

ii) Defined Benefit Plan

The Company''s liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC''s actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial gains and losses are recognised immediately in the Profit & Loss Statement as income or expense.

iii) Gratuity liability has been covered by master policy of Life Insurance Corporation of India under irrevocable trust.

(h) Earnings Per Share

The Basic Earnings/ (Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the financial year. The Diluted Earnings/(Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the year and the Potential Equity Shares.

(i) Government Grants

Investment Incentive from State Government has been credited to Investment Incentive Account and is being recognised as income on a systematic and rational basis over the useful life of the assets, in the proportion in which the depreciation on these assets is charged.

(j) Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing difference between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognised to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

However, in view of the loss during the financial year 2013-14, the Company has not recognised the Deferred Tax Assets in respect of the loss during the financial year 2013-14.

(k) Accounting policies not specifically referred above are consistent with generally accepted accounting practices.

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Mar 31, 2013

(a) AccountingConvention

These accounts are prepared under the historical cost convention and on the basis of going concern. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted foronmercantile basis.

(b) FixedAssets

Fixed Assets are stated at values determined by the valuer less depreciation. Machinery Spares have been capitalised as and when procured. Direct costs are capitalised till the assets are ready to be put to use. These costs also includes financing cost (including exchange rate fluctuations) relating to specific borrowing attributable to Fixed Assets. When an assetis scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, if any, is reflected in Profit and Loss Account.

(c) Depreciation

Depreciation on Fixed Assets has been provided in the accounts on ''Straight Line Method'' as per Schedule XIV to the Companies Act, 1956. Fixed Assets individually costing upto Rs. 5,000/- are depreciated 100% in the year of purchase. Depreciation on Foreign Exchange adjustments arising from foreign exchange variations is charged on residual useful life of asset.

(d) Valuation of Inventories

The items of inventories are valued at lower of cost or estimated net realisable value. Cost of raw material, building material and stores & spares is determined (net of cenvat) at monthly weighted average basis. Material in transit is taken at cost price. Stock in process is valued at cost of raw material added. Cost of finished goods includes material cost and appropriate portion of production and administrative overheads and excludes interest and marketing expenses. The value of finished goods stock is inclusive of excise duty. Scrap, if any, at the year end does not form part of closing inventory.

(e) RevenueRecognition

Saleofgoods isrecognisedat the pointof dispatch tothe Customer. Sales include excise duty applicable.

(f) Foreign Exchange Transactions

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss account except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

(g) Employee Benefits

i) Defined Contribution Plan

The Company''s Contribution paid/payable during the year towards Provident Fund Scheme and Superannuation Scheme are recognised as expense in the Profit& Loss Account.

ii) Defined Benefit Plan

The Company''s liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC''s actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial gains and losses are recognised immediately inthe Profit &Loss Account as income or expense.

iii) Gratuity liability has been covered by master policy of Life Insurance Corporation of India under irrevocable trust.

(h) Earnings PerShare

The Basic Earnings/ (Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the financial year. The Diluted Earnings/(Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the year and the Potential Equity Shares.

(i) GovernmentGrants

Investment Incentive from State Government has been credited to Investment Incentive Account and is being recognised as income on a systematic and rational basis over the useful life of the assets, in the proportionin which the depreciation onthese assetsischarged.

(j) TaxesonIncome

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing difference between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognised to the extent that there is a reasonable certainty that sufficient future taxable income willbeavailable against which such deferred tax assets can be realised.

However, in view of the losses during the financial years 2009-10 and 2010-11, the Company has not recognised the Deferred Tax Assetsin respectofthe loss during the financial year 2010-11.

(k) Accounting policies not specifically referred above are consistent with generally accepted accounting practices.

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Mar 31, 2012

(a) Accounting Convention

These accounts are prepared under the historical cost convention and on the basis of going concern. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted for on mercantile basis.

(b) Fixed Assets

Fixed Assets are stated at values determined by the valuer less depreciation. Machinery Spares have been capitatised as and when procured. Direct costs are captalised till the assets are ready to be put to use. These costs also includes financing cost (including exchange rate fluctuations) relating to specific borrowing attributable to Fixed Assets. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit {including capital profit) or loss, if any, is reflected in Profit and Loss Account.

(c) Depreciation

Depreciation on Fixed Assets has been provided in the accounts on 'Straight Line Method' as per Schedule XIV to the Companies Act, 1956. Fixed Assets individually costing upto Rs.5,000/- are depreciated 100% in the year of purchase. Depreciation on Foreign Exchange adjustments arising from foreign exchange variations is charged on residual useful life of asset,

(d) Valuation of Inventories

The items of inventories are valued at lower of cost or estimated net realisable value. Cost of raw material, building material and stores & spares is determined (net of cenvat) at monthly weighted average basis. Material in transit is taken at cost price. Stock in process is valued at cost of raw material added. Cost of finished goods includes materia! cost and appropriate portion of production and administrative overheads and excludes interest and marketing expenses. The value of finished goods stock is inclusive of excise duty. Scrap, if any, at the year end does not form part of closing inventory.

(e) Revenue Recognition

Sale of goods is recognised at the point of dispatch to the Customer. Sales include excise duty applicable.

(f) Foreign Exchange Transactions

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss account except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

(g) Employee Benefits

i} Defined Contribution Plan

The Company's Contribution paid/payable during the year towards Provident Fund Scheme and Superannuation Scheme are recognised as expense in the Profit & Loss Account.

ii) Defined Benefit Plan

The Company's liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC's actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial gains and losses are recognised immediately in the Profit & Loss Account as income or expense.

iii) Gratuity liability has been covered by master policy of Life Insurance Corporation of India under irrevocable trust.

(h) Earnings Per Share

The Basic Earnings/ (Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the financial year. The Diluted Earnings/(Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the year and the Potential Equity Shares.

(i) Government Grants

Investment Incentive from State Government has been credited to investment Incentive Account and is being recognised as income on a systematic and rational basis over the useful fife of the assets, in the proportion in which the depreciation on these assets is charged.

(j) Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing difference between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognised to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

However, in view of the losses during the financial years 2009-10 and 2010-11, the Company has not recognised the Deferred Tax Assets in respect of the loss during the financial year 2010-11.

(k) Accounting policies not specifically referred above are consistent with generally accepted accounting practices.

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Mar 31, 2011

(a) Accounting Convention

These accounts are prepared under the historical cost convention and on the basis of going concern. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted for on mercantile basis.

(b) Fixed Assets

Fixed Assets are stated at values determined by the valuer less depreciation. Machinery Spares have been capitalised as and when procured. Direct costs are captalised till the assets are ready to be put to use. These costs also includes financing cost (including exchange rate fluctuations) relating to specific borrowing attributable to Fixed Assets. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, If any, is reflected in Profit and Loss Account.

(c) Depreciation

Depreciation on Fixed Assets has been provided in the accounts on 'Straight Line Method' as per Schedule XIV to the Companies Act, 1956. Fixed Assets Individually costing upto Rs.5,000/- are depreciated 100% in the year of purchase. Depreciation on Foreign Exchange adjustments arising from foreign exchange variations Is charged on residual useful life of asset.

(d) Valuation of Inventories

The items of inventories are valued at lower of cost or estimated net realisable value. Cost of raw material, building material and stores & spares Is determined (net of cenvat) at monthly weighted average basis. Material in transit is taken at cost price. Stock in process is valued at cost of raw material added. Cost of finished goods includes material cost and appropriate portion of production and administrative overheads and excludes interest and marketing expenses. The value of finished goods stock Is Inclusive of excise duty. Scrap, if any, at the year end does not form part of closing inventory.

(e) Revenue Recognition

Sale of goods is recognised at the point of despatch to the customer. Sales includes excise duty applicable.

(f) Foreign Exchange Transactions

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation Is recognised In the profit and loss account except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

(g) Employee Benefits

i) Defined Contribution Plan

The Company's Contribution paid/payable during the year towards Provident Fund Scheme and Superannuation Scheme are recognised as expense in the Profit & Loss Account.

ii) Defined Benefit Plan

The Company's liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC's actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial gains and losses are recognised immediately in the statement of Profit & Loss Account as income or expense.

iii) Gratuity liability has been covered by master policy of Life Insurance Corporation of India under irrevocable trust.

(h) Earnings Per Share

The Basic Earnings/(Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the financial year. The Diluted Earnings/(Loss) per Share is computed on the basis of weighted average number of Equity Shares outstanding during the year and the Potential Equity Shares.

(i) Government Grants

Investment Incentive from State Government has been credited to Investment Incentive Account and is being recognised as income on a systematic and rational basis over the useful life of the assets, in the proportion in which the depreciation on these assets is charged.

(j) Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing difference between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognised to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

However, in view of the losses during the financial years 2009-10 and 2010-11, the Company has not recognised the Deferred Tax Assets in respect of the loss during the financial year 2010-11. (k) Accounting policies not specifically referred above are consistent with generally accepted accounting practices.

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Mar 31, 2010

(a) Accounting Convention

These accounts are prepared under the historical cost convention and on the basis of going concern. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted for on mercantile basis.

(b) Fixed Assets

Fixed Assets are stated at values determined by the valuer less depreciation. Machinery Spares have been capitalised as and when procured. Direct costs are captalised till the assets are ready to be put to use. These costs also includes financing cost (including exchange rate fluctuations) relating to specific borrowing attributable to Fixed Assets. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, if any, is reflected in Profit and Loss Account.

(c) Depreciation

Depreciation on Fixed Assets has been provided in the accounts on Straight Line Method as per Schedule XIV to the Companies Act, 1956. Fixed Assets individually costing upto Rs.5,000/- are depreciated 100% in the year of purchase. Depreciation on Foreign Exchange adjustments arising from foreign exchange variations is charged on residual useful life of asset.

(d) Valuation of Inventories

The items of inventories are valued at lower of cost or estimated net realisable value. Cost of raw material, building material and stores & spares is determined (net of cenvat) at monthly weighted average basis. Material in transit is taken at cost price. Stock in process is valued at cost of raw material added. Cost of finished goods includes material cost and appropriate portion of production and administrative overheads and excludes interest and marketing expenses. The value of finished goods stock is inclusive of excise duty. Scrap, if any, at the year end does not form part of closing inventory.

(e) Revenue Recognition

Sale of goods is recognised at the point of despatch to the customer. Sales includes excise duty applicable.

(f) Foreign Exchange Transactions

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss account except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

(g) Employee Benefits

i) Defined Contribution Plan

The Companys Contribution paid/payable during the year towards Provident Fund Scheme and Superannuation Scheme are recognised as expense in the Profit & Loss Account. ii) Defined Benefit Plan

The Companys liabilities towards leave encashment and gratuity are determined by an independent actuary and LICs actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial gains and losses are recognised immediately in the statement of Profit & Loss Account as income or expense. iii) Gratuity liability has been covered by master policy of Life Insurance Corporation of. India under irrevocable trust.

(h) Earnings Per Share

The Basic Earnings per Share is computed on the basis of weighted average number of Equity Shares outstanding during the financial year. The Diluted Earnings per Share is computed on the basis of weighted average number of Equity Shares outstanding during the year and the Potential Equity Shares.

(i) Government Grants

Investment Incentive from State Government has been credited to Investment Incentive Account and is being recognised as income on a systematic and rational basis over the useful life of the assets, in the proportion in which the depreciation on these assets is charged.

(j) Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing difference between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognised to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

(k) Accounting policies not specifically referred above are consistent with generally accepted accounting practices.